?? Let's Talk Trends
Hi ??
I recently gave a talk at a conference and it was focused on trends app makers need to know to grow their apps and games. I mentioned some of those in this week's newsletter, including the most important trend right now.
Ariel.
P.S. - You can find my APS NYC 2024 Opening Session talk slides here.
P.P.S - Did you know you can see estimated downloads and revenue for any app for free on Appfigures? More info here.
In this newsletter:
1. X's Mobile Revenue Continues to Drop for 3rd Consecutive Month - Longest Ever Decline
X's mobile revenue has been on a very weird trend in the last few months. And by weird I really mean negative. It's weird because over the 12 months ending March of this year, the app only experienced a negative month four times.
But April kicked off a negative trend that's still going - three consecutive months of declining revenue - not only is revenue not growing but it's actually shrinking.
Let's have a look at the numbers:
According to our App intelligence, X's mobile apps generated $7.4M of net revenue - what X gets to keep after Apple and Google take their cut - in June.
If you've been following my monthly check-ins you'll know that's a tiny bit lower than May's $7.6M haul, which was lower than April's $8M haul, which was lower than March's $8.2M net revenue.
So, things aren't going up.
Although this isn't the first time revenue is on the decline, this is the first time X has endured a multi-month decline. And although 2024 is shaping up to be no-so-great for the black bird, 2023 was pretty great.
Our estimates show that in 2023, net revenue rose 347% from under $2M to over $7M - all net.
But in 2024 X's arch nemesis Threads, which launched in the summer of 2023, started getting more traction and is now growing its downloads about twice as fast as X. I can imagine that's one reason for X's revenue drop.
Another is X's introduction of additional subscription options - more expensive options - that promise removing ads in different areas (but don't, in my experience) which make X seem like an expensive playground.
But from my own personal experience, it's X's algorithm changes that float content many simply don't want, which drops engagement, which makes it harder to monetize. Is your experience different?
When Twitter rolled out its paid subscriptions I thought it'd be a breakthrough for an industry that couldn't monetize. And it was, but for everyone who copied it and not Twitter or X.
It's still possible, but it's a real uphill battle.
Get App Intelligence You Can Count on from Appfigures. Get started now or schedule a walkthrough to see the features and data quality.
2. This is The Most Important Trend Every App Developer Must Know About
A few weeks ago I gave the opening talk at the App Promotion Summit in NYC and being the keynote I wanted to summarize where our entire industry is in a single graphic.
Not an easy thing to do considering there are so many ways to look at the industry but I managed to find the one trend everyone who's working on an app or game should be aware of - whether you're a indie developer, a marketer, or an executive responsible for an app.
The trend is simple - Downloads are trending down while revenue is rising.
The easiest way to see it at the macro (market) level is by using the Mobile Download Index and Mobile Revenue Index:
As of last week, the Mobile Revenue Index for the US App Store hit 473.91. Google Play's was a lot lower, at 262.93, but still high.
Downloads were not...
The US App Store's Mobile Download Index sat at 70.96 and Google Play's at 61.24. That's very low...
In case you're not familiar, the Mobile Download Index and Mobile Revenue Index track the performance of the top apps and compare them to the point in time in the past. Index values greater than 100 mean growth and under 100 mean decline.
You can read more about how the two indices work and how to access them here.
By this simple definition, revenue is growing rapidly while downloads are declining. Looking at the index values over time, we can see a pretty clear trend that's almost perfectly consistent with the exception of 2020 (aka covid times).
And while this data is specific to the US the both indices are available for many other countries and almost all major countries display the same trend. Some countries, like India, Indonesia, Malaysia, and a few others, are displaying growth in downloads and revenue. Those are countries that only started sprouting recently.
Generally, those countries have a much lower volume, but India is an exception, given it's large population and growing access to mobile devices, especially Androids.
What This Means for You
As a developer, marketer, or really anyone responsible for app growth, this is the trend you have to watch. Fewer downloads and more apps than ever means you're going to have to work harder to get every download. App Store Optimization matters, optimizing your ad spend matters, and optimizing your onboarding matters.
And once you do get the download, you'll need to convert it into revenue as best as you can, because the odds of getting a paying user are higher - if you try.
There are a few good AF Chats and other streams about optimizing on our YouTube Channel I'd highly recommend checking out.
3. Subscription Apps Share of Revenue Hit an All-Time High This Year
Browsing the App Store and Google Play top charts, it's very clear more and more apps are making money through subscriptions.
Don't believe me? Right now, 31 of the top 50 grossing apps and games in the US App Store use subscriptions!
I used Explorer to see how many apps use subscriptions across the App Store and Google Play vs. how many don't, and also how much money subscription apps make vs. their non-recurring competitors - the results surprised me (and a room full of App Promotion Summit attendees).
In May, 4% of apps and games on the App Store and Google Play monetized with subscriptions. Yes, just 4%. Even though more and more apps are switching, the stores are still full of apps and games that are free, free with ads, or use non-recurring in-app purchases.
And even though I've been saying "apps and games" over and over, it's mostly apps that are leveraging subscriptions. For every game that monetizes with subscription there are 10 apps that do!
But more game developers are catching on, so I expect that ratio to change in the future. And the reason I expect it to change is simple - Subscriptions are earning their publishes more. A lot more.
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According to our App Intelligence, subscription apps were responsible for 44% of all revenue in May.
Yes, a handful of (mostly) apps are generating nearly half of all revenue in the App Store and Google Play. And that number has also been inching up. Slowly, but we're talking billions of dollars here, so I don't expect it to skyrocket overnight. Maybe over a few nights.
This isn't to say that if you publish an app that offers subscriptions you'll be an overnight millionaire, but choosing subscriptions over other methods of monetization is going to make it easier to build a sustainable app business.
4. App Downloads Dropped Again... The Most Downloaded Apps in the World in June
I crunched the numbers and rounded up the most downloaded apps in the world in June. Unlike May, which was incredibly stagnant, June saw a bit more movement. Maybe more than a bit.
According to our App Intelligence, Instagram beat TikTok again as the most downloaded app in the world. We estimate the app made it's way into 61M devices. Instagram's rein started back in November of last year and is still going strong, and it's hard to say whether it's due to increase in demand for Instagram or the drop in demand for TikTok, but based on the trends I'm inclined to think it's the latter.
TikTok was the second most downloaded app in the world with 52M estimated downloads in June. It's important to note that even though the US isn't TikTok's biggest market right now, monthly downloads in the US have grown 25% this year, according to our estimates.
Facebook, WhatsApp, and Telegram round out the top 5 most downloaded apps in the world. Telegram dropped out of the top 5 in May after being a solid #5 for quite a few months, but is back now with 32M estimated downloads.
Normally I stop here but the bottom five is also interesting in June, so let's dive in.
Temu kept its 6th spot from May, in June. But to "keep" its spot Temu actually needed more downloads than May, and it got them, rising to the 2nd spot on the App Store and 7th on Google Play. Temu's expensive ad campaigns are well-timed, and while I don't know if they're ROI positive, I'm sure they're generating the exposure they're aiming for.
Threads, the app that's slowly choking X, also rose into the 8th spot in the overall chart in June with 23M downloads. X lagged behind in downloads in June, again, with just 12M estimated downloads across the App Store and Google Play.
And another new name made the list in June: Disney+ Hotstar. That's Disney+ in India. We haven't seen it make the chart yet even once, but it did in June with 23M estimated downloads. Downloads spiked in early June and then dipped at its end suggesting we won't see Disney+ Hotstar back on this soon.
Our App Intelligence shows that in June, the top 10 most downloaded apps saw a total of 355M downloads globally. That's a tiny bit lower than May's total, but not enough to be surprised by - the trend continues.
5. App Revenue Remains Strong in June - The Highest Earning Apps in the World
App revenue has been on the rise in the last year, and looking back at our highest-earning apps charts, it's clear the list is very sticky. If you can make your way in, you're likely to stay.
I crunched the numbers and rounded up the highest-earning apps in June, and for a change, also compiled a chart to show how the total revenue for the top 10 apps every month changed in the last year.
Let's start by analyzing June:
TikTok was the highest-earning app in the world in June. We estimate it brought in $201M in net revenue - what Bytedance gets to keep after store fees - in June from the App Store and Google Play.
YouTube came in a distant second with $135M in estimated net revenue.
Disney+, Tinder, and Max round out the top five - and if you've been following the series you'll notice this is the exact lineup from May. The similarities extend down to 8th place. Everything above remains identical - talk about sticky!
Crunchyroll replaced Tencent Video and Hulu squeezed into the top 10.
Our estimates show that in June, the top 10 highest-earning apps in the world brought in $796M of net revenue to their publishers. A tad higher than May's total, but enough to sustain the hot summer.
While the ranks themselves were pretty boring in June, revenue growth wasn't.
I went back through all of our highest-earning apps charts for the last 12 months and the trend is very positive.
According to our App Intelligence, revenue of the top 10 apps rose 21% in the last 12 months. In more absolute terms, net revenue rose $139M since July of 2023.
December of 2023 got close, and considering it's the season for revenue, that's not a surprise. However, June beat it by a about $21M.
I don't expect this growth to stop or slow down any time soon. Consumers have accepted subscriptions and publishers have gotten better at converting downloads into revenue. If you're not doing that with your app you're leaving money on the table.
6. Which Types of Apps Get the Most Downloads and Make the Most Money?
Which types of apps get the most downloads? And which make the most money?
I analyzed the top 100 apps and games in the world to answer these two simple questions and the results were... interesting.
Let's start with downloads:
Games were the single most downloaded category among the top 100 most downloaded apps at 41%. Many expect the share to be flipped and for games to dominate, but they don't.
The only other category with a double-digit share is Photo & Video with 10%, which really surprised me.
Shopping came in third with 8%, Entertainment with 7%, and Utilities, also with 7% make up the top 5 categories when it comes to downloads.
Revenue is similar but not the same:
When it comes to revenue, games are strong, with a 55% share, according to our App Intelligence. Historically, game publishers were better at optimizing for revenue, but that's changing.
Entertainment, the category where you'll find most streaming apps, is the second largest with 14%. It's the only category other than games to have a double-digit share.
Notice that it wasn't even a top 5 in terms of downloads, which means those apps are doing a great job converting downloads to paying users.
Photo & Video with 8%, Music with 7%, and Social Networking with 4% make up the top 5, and you'll notice two of the three aren't in the top five in terms of downloads. And it's not that they're close to the top at all, which means developers in those categories are working extra hard to convert their downloads.
You should be, too.
And that's all I have for you this week. I hope you've learned something new and please share the newsletter ??
Note: All figures included in this report are estimated. Unless specified otherwise, estimated revenue is always net, meaning it's the amount the developer earned after Apple and Google took their fee.